I&M (AEP) Slashes Energy Efficiency Programs with the Blessing of the IURC (2021)
Energy efficiency is the least cost resource to meet our energy needs. Furthermore, energy efficiency is the best mechanism to make energy bills more affordable, improve public health, reduce carbon and other toxic emissions, protect the quality of our environment, and create and support local jobs which cannot be outsourced. Since 1974, CAC has worked tirelessly to educate the public, regulators, and policy makers on the value of energy efficiency
On August 3, 2020, Indiana Michigan Power (I&M, a subsidiary of American Electric Power (AEP)) and the Office of Utility Consumer Counselor (OUCC) filed a settlement before the Indiana Utility Regulatory Commission (IURC) in I&M’s most recent three-year energy efficiency plan, also called demand side management, or DSM. The settlement was filed in IURC Cause No. 45285.
On February 3, 2021, the IURC approved the settlement, which guts I&M's energy efficiency programs and cuts in half the energy savings realized by I&M on an annual basis for the next three years when compared with the energy savings actually achieved by I&M in the previous three years. I&M achieved an average energy savings of 0.91% of energy sales from 2017 through 2019. Unfortunately, the settlement proposed would authorize savings levels of 0.45% from 2020 through 2022.
The level of savings in the settlement are inadequate and unreasonable compared to past results and I&M's Energy Efficiency (DSM) program in its Michigan jurisdiction. I&M operates programs within its Michigan jurisdiction and has recently filed a plan before Michigan regulators which proposes to achieve an annual first-year savings of 0.97% of retail sales, or roughly double what they are proposing in Indiana.
The settlement would place I&M as the worst performing utility in Indiana for energy efficiency investments and among the worst performing DSM programs nationally. This is not the time for I&M to slash investments in energy efficiency when they are currently planning to invest billions in fossil fuel power-plants to meet their customer’s energy needs in the foreseeable future. I&M should be investing in energy efficiency now in an effort to avoid these massive investments in expensive and un-needed fossil fuel power plants.